Apr 7, 2007

Fruit, Vegetable Industries Have Fresh Reason for Hope

Trade show season always is exciting because you get the entire industry together to talk about the past growing season and the possibilities of the future.

One of the most upbeat trade shows I’ve attended in the past 12 years as publisher was this year’s Great Lakes Fruit, Vegetable and Farm Market EXPO held Dec. 7-9 in Grand Rapids, Mich. I don’t think I’ve ever seen the Great Lakes fruit and vegetable industries hitting a high note on the same year. The optimism was inspiring and uplifting.

There are many positives out there right now including high gas prices, trucking shortages, boom of the fresh-cut industry and demand for regional produce.

Talk of the Show

One grower I talked to told me he hoped gas would hit $5 a gallon. At first I thought he was crazy, but then he went on to explain that as gas prices rise, it gets more expensive to ship in produce from California, Florida or Mexico to the major metropolitan areas of the Midwest and East Coast. A load of produce transported from California to the Midwest now costs more than $3,000. And shipped to the East Coast, it’s $6,000.

Buyers will sometimes ship celery in from a few thousand miles away to save a few pennies per pound instead of purchasing the celery from a growing area just a few hundred miles away.

There also is a shortage of trucks due to the growing economy and new regulations that make trucking more complicated and expensive.

This could be the decade of “local produce” and I hope growers will see new marketing opportunities.

Cutting Edge Opportunity

The best talk I heard at the EXPO was from Earl Peterson of Peterson Farms in Shelby, Mich. His large processing operation started providing McDonalds with the new Apple Dippers about a year ago.

“We are at a beginning of a revolution,” he said. “For lots of young people apples are not convenient. Fresh-cut will dramatically change the apple consumption in the United States.”

Cut packaged salads remain the big engine pulling the fresh-cut train with more than $3 billion in annual retail sales followed by cut vegetables at $1.7 billion, according to the study. But coming on fast is cut fruit, currently a $300 million category at retail but on a trajectory to surpass $1 billion in the next three to four years.

Wow – this is great news for fruit and vegetable growers!

Several companies tried apples slices in the 1990s with no success because they couldn’t find the right market and shelf life was an issue, Peterson said.

“We could get them to the shelves, but not into people’s carts,” he said.

Today anti-obesity has become a huge issue and McDonalds is in the cross hairs. Lucky they picked fresh apples slices and opened a new market for the fruit because the people eating at McDonalds on any day probably weren’t going to consume an apple that day.

There are even more possibilities on the horizon for apple slices, Peterson said. Club stores are going to start selling multi-packs of single serve bags and some school districts have launched pilot programs using bags of fresh-cut fruit in vending machines.

Remember the vending machine for whole apples that never took off? We’ll the idea was great, but lacked the right presentation. The best inventors are always ahead of their times.

Fresh-cut fruits and vegetables are going to go head-to-head against snack foods such as candy bars and potato chips as healthy alternatives, Peterson said.

“Ten years from today you will be able to go down to the hotel lobby and purchase fresh-cut carrots, celery, apples or orange slices from a vending machine,” he said.

The new fresh-cut market is here, but growers won’t be able to just sit idly by doing the same old things and expect to get more for their apples.

“We need apples that are better than fresh quality,” he said. “Not only do people see the outside, but they see the inside as well. We can’t have apples with water core.”

The perfect apple is 2-3/4 inches to 3 inches and has to be the right variety, Peterson said. Remember all those Empires you yanked out over the past few years? Well that variety plus Jonathon and Gala work best – unfortunately those are the hardest to size.

The industry also must make sure food safety is taken seriously.

“We have to treat the processing area like it’s a hospital operating room,” Peterson said. “This is not a project that can be done in a barn or packing facility. It will only take one bad press report to set the industry back years.”

A few years back the fruit industry was feeling the pinch of over production and the flood of cheap Chinese apple juice. Fresh-cut apples, as well as other fresh-cut fruits and vegetables, can never be imported. It must be done regionally in the right kinds of facilities with just-in-time deliveries.

These are exciting times in the fruit and vegetable industries and everyone is positioned to take advantage of the opportunity.